Canadian real GDP edged up by 0.1 per cent in October, following a 0.2 per cent increase in September. Growth in services-producing industries (+0.3 per cent) offset declines in goods-producing industries (-0.7 per cent) as real GDP grew in 11 of 20 subsectors. Canadian real GDP is now roughly 2.9 per cent above its pre-pandemic, February 2020 level. Preliminary estimates suggest that output in the Canadian economy grew again by 0.1 per cent in November.

Recent GDP growth figures, while not strong, have tended to outpace expectations. With 0.1 per cent increases expected for October and November, at this rate fourth quarter GDP growth could come in at an annualized rate of around 1.2 per cent. This would be well-above the Bank of Canada's forecast of 0.5 per cent for Q4 as of the October monetary policy report. Alongside higher than expected core CPI figures released Wednesday, today's GDP figures could make it more challenging for the central bank to avoid an additional rate hike at its meeting on January 25th.

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Canadian prices, as measured by the Consumer Price Index (CPI), rose 6.8 per cent on a year-over-year basis in November, a slight decrease from the 6.9 per cent rate in October. Despite rising food and shelter costs, falling gasoline and furniture prices softened the pressure on prices. Rising interest rates contributed to an increase in mortgage interest costs, which were up 14.5 per cent year-over-year as Canadians renewed or initiated higher-rate mortgages. Month-over-month, on a seasonally-adjusted basis, prices were up 0.4 per cent in November, down from 0.6 per cent in October. In BC, consumer prices rose 7.2 per cent year-over-year, down from 7.8 per cent last month. Average hourly wages grew 5.6 per cent year-over-year in November, indicating a decline in purchasing power. 

November's CPI numbers were lower than October, but this was largely driven by volatile gasoline prices and base-year effects in furniture prices. Food and shelter costs continued to rise strongly in November and the Bank's preferred measures of core inflation, which strip out volatile components, ticked up in November. Overall, inflation remains well above the Bank of Canada's 2 per cent target and we will need to see more positive news in core inflation over the next several months before the Bank changes direction on interest rates.

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Canadian seasonally-adjusted retail sales rose 1.4 per cent in October to $62 billion. Sales rose in 6 of 11 subsectors, but were led by higher sales at gasoline stations (+6.8 per cent) and food and beverage stores (+2.2 per cent). Core retail sales, which strips out gasoline and motor vehicle and parts dealers, rose 0.9 per cent in October. In volume terms, sales were unchanged. 

In BC, seasonally-adjusted sales rose 1.3 per cent in October. Compared to the same month last year, retail sales were up 3.6 per cent in the province. In the Greater Vancouver region, sales rose 1.3 per cent month-over-month and were up 3.1 per cent year-over-year. 

In October, Canadian e-commerce sales fell 4.4 per cent to $3.4 billion, corresponding to 5.2 per cent of retail sales. This percentage remains elevated relative to pre-pandemic levels, but is lower than during core months of the pandemic in 2020 and 2021. 

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Canadian housing starts were essentially flat in November, declining just 0.2 per cent to 264.2k units at a seasonally-adjusted annual rate (SAAR). Comparing year-over-year, starts were down from November of 2021 (14 per cent). Single-detached housing starts fell 5 per cent to 67.8k, while multi-family and others rose 2 per cent to 196.4k (SAAR). 

In British Columbia, starts rose by 9 per cent in November to 50.5k units SAAR in all areas of the province. In areas in the province with 10,000 or more residents, single-detached starts fell 4 per cent m/m to 7.4k units while multi-family starts rose 13 per cent to 39.6k units. Starts in the province were 28 per cent above the levels from November 2021. Starts were up by 2k in Vancouver and 0.9k in Kelowna, but were down by 0.1k in Abbotsford and unchanged in Victoria. The 6-month moving average trend rose 3 per cent to 50.7k in BC in November. 

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The British Columbia Real Estate Association (BCREA) reports that a total of 4,512 residential unit sales were recorded by the Multiple Listing Service^® (MLS^®) in November 2022, a decrease of 50.8 per cent from November 2021 and about 30 per cent below a historical average November. The average MLS^® residential price in BC was $906,785 an 8.6 per cent decrease from $992,245 recorded in November 2021. Total sales dollar volume was $4.1 billion, a 55 per cent decline from the same time last year. 

“A lot has changed in 2022,” said Brendon Ogmundson, Chief Economist. “This time last year, home sales were near a record for November, home prices were accelerating, and mortgage rates were less than half of current levels. Elevated mortgage rates will continue to constrain sales activity, though with the Bank of Canada nearing the end of its tightening cycle and benchmark bond yields falling, mortgage rate relief may be on the horizon.”

Year-to-date, BC residential sales dollar volume was down 28.7 per cent from the same period in 2021 to $77.4 billion. Residential unit sales were down 34.4 per cent to 77,376 units, while the average MLS^® residential price was up 8.6 per cent to $1 million.   

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Canadian employment rose by a hair to 19.666 million in November, up by 10,000 (0.05 per cent). The Canadian unemployment rate fell by 0.1 to 5.1 per cent, hovering just above all-time lows. Average hourly wages were up 5.6 per cent from this time last year. Wage gains remain below the inflation rate, however, which hit 6.9 per cent year-over-year in the most-recent data. Total hours worked were up 1.8 per cent year-over-year. 

Employment in BC fell by 0.5 per cent to 2.748 million in November, while Metro Vancouver's employment rose by 0.1 per cent month over month. BC's unemployment rate rose in November to 4.4 per cent, still near record lows, while Metro Vancouver's rate rose to 4.7 per cent. Among the provinces, only Quebec and Saskatchewan currently have a lower unemployment rate. 

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The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver* is currently $1,131,600. This represents a 1.5% decrease from Oct 2022 and a 0.6% decrease from November 2021.

Specifically:

- The benchmark price for detached homes decreased 1.9% from Oct 2022 and decreased 1.7% from Nov 2021.

- The benchmark price for townhouses decreased 0.9% from Oct 2022 and increased 3.5% from Nov 2021.

- The benchmark price for apartment/condos decreased 1.5% from Oct 2022 and increased 2.7% from Nov 2021.

*Areas covered by the Real Estate Board of Greater Vancouver include: Burnaby, Coquitlam, Maple Ridge, New Westminster, North Vancouver, Pitt Meadows, Port Coquitlam, Port Moody, Richmond, South Delta, Squamish, Sunshine Coast, Vancouver, West Vancouver, and Whistler.